To Empire Builders,
Happy Monday! Today’s edition talks a bit about Cava, and teases out the upcoming podcast episode.
Let’s dive in 🫡
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What’s on My Mind 🧠
Cava Keeps Winning
Cava posted an incredible Q2, bucking the trend of many other franchises & chains right now. The core stats to know:
9.7% SSS growth
5.3% traffic growth
+17 new locations opened
And that’s after a Q1 where they again posted +9.7% on SSS, and + 6.8% in traffic. All in all, they are dominating right now.
Origins
CAVA began in 2006 as a full-service restaurant serving food inspired by the 3 founders Greek heritage. Current CEO Brett Schulman joined as a fourth partner, helping the struggling business become profitable through tighter financial controls, waste reduction, and supply-chain improvements.
Brett is the one who proposed adapting the concept into a fast-casual “walk-the-line” format. After a year of development and several months of fundraising, the first modern CAVA opened in Bethesda, Maryland, on January 18, 2011.
Why are They Crushing?
For one, you should this article by Rick Vanzura, as he just interviewed Brett and details it in a newsletter format.
But my simple quick take…
I’ve quoted this before from Todd Graves, which is that rule #1 for any restaurant chain in QSR or fast casual is to have a craveable product, and Cava’s mediterranean profile yields numerous craveable meals.
They occupy the sweet spot between craveability and health, giving consumers food they feel good eating both during and after the meal.
Beyond that - the walk-the-line format is familiar, but most importantly - the company has maintained compelling value. They’re delivering food at a price customers perceive as accessible for the quality and portion size.
They’ve also deliberately raised prices more slowly than inflation and many competitors, protecting that value proposition even as restaurant costs increased.
In an environment where many weren’t prepared for the onslaught of rising costs, Cava is taking market share at an accelerated pace, and execs believe they could reach 2,000 units in the future, up from their 480 today.
It’s already a massive company with an $8.3B market cap, but they’re just getting started…
Coming Soon on Empires 🎧
Multi-Unit Wendy’s Franchisee & Emerging Brand Founder
The next guest is a multi-unit Wendy’s owner, as well as founder their own QSR that is now franchising. Stay tuned!
QSR Corner 🍔
Domino’s Adds Personal Pizza
The Detroit-style pizza, dubbed the Domino, will help the brand capture meal occasions ranging from afternoon snacks to midnight meals.
McDonald’s Rolls Out Red Bull Energy Drinks
The addition could help boost traffic, particularly during the afternoon daypart.
Inspire Brands Debuts New Co-Brand
The first Buffalo Wild Wings Go, Jimmy John’s co-branded restaurant opened in Florida.
Burger King is the New #2 - How They Did It
Overhauled burger and updated restaurants help chain rebound from years of struggles
Pizza Hut’s Global CEO Resigns
Aaron Powell, who has been at the pizza chain since 2021, will leave his post following the close of its sale to LongRange Capital.
Best of the Rest 🧱
Casey’s is Acquiring 24 Stores
The deal will add Pak-A-Sak c-stores in the Texas Panhandle to Casey’s growing footprint as the Iowa retailer continues targeting rural markets across the state
Sunoco to Acquire Offen Petroleum for $600M
The deal expands Sunoco’s distribution footprint by over 800 retail stations as it ramps up its M&A activity.
Michaels Debuts New Store Format at 3 Locations
The spaces include revamped department layouts, new personalization services and a self-checkout queue exclusive to rewards members.
That’s it for today’s newsletter, if you enjoyed it, please forward to anyone else in your network who would benefit or find it interesting!